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Date: 05-17-2017

Case Style: Luis Vega v. New Forest Home Cemetery, LLC

Case Number: 16-3119

Judge: Easterbrook

Court: United States Circuit Court of Appeals for the Seventh Circuit on appeal from the Northern District of Illinois (Cook County)

Plaintiff's Attorney: Carlos Becerra and Perla Gonzalez

Defendant's Attorney: Susan Eileen Walsh

Description: Luis Vega filed this suit alleging that
his former employer, New Forest Home Cemetery, LLC (“New
Forest”), by failing to pay him for his final two weeks of work,
violated his right under the Fair Labor Standards Act of 1938,
29 U.S.C. § 206(b), to compensation at the minimum wage. The
district court entered summary judgment in favor of New
2 No. 16-3119
Forest, reasoning that Vega had not exhausted the grievance
procedure specified by the collective bargaining agreement
between New Forest and the union representing its workforce
before he filed suit. R. 25. Because the collective bargaining
agreement did not clearly and unmistakably waive Vega’s
right to pursue his FLSA claim in a judicial forum, we reverse.
I.
For purposes of reviewing the court’s summary judgment
decision, we recite the facts in the light most favorable to Vega.
E.g., Thompson v. Holm, 809 F.3d 376, 378 (7th Cir. 2016).
Vega worked for New Forest as a seasonal employee from
May 2010 to June 2015. His employment was conditioned upon
membership in the Service Employees International Union (the
“union”), and he was therefore subject to the terms of a
collective bargaining agreement between the union’s local and
New Forest. Article VIII of that agreement sets forth a mandatory
four-step procedure culminating in arbitration to resolve
employee grievances.1 Section 8.1 of the agreement defines
“grievance” to include “a claim or dispute concerning pay,
hours[,] or working conditions or the interpretation or application
of this Agreement.”
1 The process, outlined in section 8.2 of the agreement, entails (1) an
informal discussion of the grievance among the employee, his union
steward or representative, and the employee’s supervisor; (2) submission
of the grievance in writing to the employer by the employee, with a copy
to the union; (3) an effort by the employer and the union’s business
representative to adjust the grievance; (4) arbitration on the demand of
either the employer or the union.
No. 16-3119 3
New Forest terminated Vega from its employ on June 3,
2015. At the time of his discharge, Vega was owed compensation
for roughly 54 hours of work in the preceding two weeks.
New Forest did not tender a final paycheck to Vega for the
wages owed to him, purportedly because it discovered that
Vega lacked a valid Social Security number and it did not
know how to lawfully make payment to him without such a
number.
The parties dispute whether Vega made efforts to initiate a
grievance regarding his final paycheck in accordance with the
collective bargaining agreement. Vega avers that he did. He
has submitted a declaration indicating that he raised the matter
with his union steward, Arzaius Lander, who told him to
contact Charles Jones, a union representative with the local
bargaining unit. Vega represents that he attempted to reach
Jones by telephone and left messages with his office, but to no
avail. Lander and Jones have both submitted affidavits denying
that Vega ever sought the union’s assistance with his unpaid
wages.
Vega, having concluded that any further attempts to pursue
the grievance process would be futile, instead filed suit in the
district court. Count I of Vega’s complaint asserts that New
Forest, in failing to pay him the wages owed for his last two
weeks of work, has violated section 6(b) of the FLSA, which
requires employers to pay an employee engaged in interstate
commerce no less than the federal minimum wage (specified
in section 6(a) of the statute) for his work. 29 U.S.C. § 206(b).
Counts II and III assert pendent state claims for violation of the
Illinois Wage Payment and Collection Act, 820 ILCS 115/1, et
seq., and for breach of contract.
4 No. 16-3119
New Forest promptly moved to dismiss the suit because
Vega had not exhausted the grievance procedure specified in
the collective bargaining agreement for any dispute about
wages, and the district court ultimately entered summary
judgment against Vega on that basis2 as to his FLSA claim.
R. 25. Although it recognized that Vega was suing to enforce
his rights under the FLSA as opposed to the collective bargaining
agreement, the court believed it to be the “generally
established” rule that a union member “must follow the
[collective bargaining] agreement’s established grievance
procedures before [he] can bring a lawsuit.” R. 25 at 3 (collecting
cases). The court was willing to assume, in light of Vega’s
representation that he attempted to reach Jones by telephone
on multiple occasions, that he had followed the first step of the
grievance process (contacting the union) as set forth in the
collective bargaining agreement. R. 25 at 3. But the court found
Vega’s account insufficient to establish that he had otherwise
exhausted his contractual remedies or that his efforts to do so
were frustrated by the union. R. 25 at 3. The court entered
judgment in favor of New Forest on that basis, and relinquished
jurisdiction over Vega’s state and common law claims.
R. 25 at 3–4.
II.
Our review of the district court’s summary judgment
decision is, of course, de novo. E.g., Madison Mut. Ins. Co. v.
2 The court converted New Forest’s motion to dismiss into one for
summary judgment in view of the affidavits and other materials beyond the
complaint that both parties had submitted in connection with the motion.
R. 25 at 1–2; see Fed. R. Civ. P. 12(d).
No. 16-3119 5
Diamond State Ins. Co., 851 F.3d 749, 753 (7th Cir. 2017). The
question posed is straightforward: Does the collective bargaining
agreement require Vega to resolve his FLSA minimum
wage claim through the specified grievance procedure, or does
it allow him to ask a court to resolve that claim regardless of
whether he has exhausted his contractual remedies?
The district court’s determination that Vega’s failure to
exhaust the grievance procedure forecloses him from seeking
relief in court presumes that because his complaint is about
New Forest’s failure to pay him, and the collective bargaining
agreement establishes a grievance procedure for a dispute over
pay, he is invariably required to use that contractual procedure
regardless of whether his claim sounds in contract or in statute.
The collective bargaining agreement between the union and
New Forest indeed does address the minimum rate of pay
owed to seasonal employees like Vega (sections 3.2 and 3.3),
sets out a mandatory grievance procedure to resolve disputes
with the employer (section 8.2), and defines grievances to
include disputes over pay, hours, or working conditions
(section 8.1). If Vega’s claim were one relying on his substantive
rights under the collective bargaining agreement, there is
no question that he would have to exhaust his contractual
remedies by pursuing a grievance or, in the alternative,
demonstrate why futility or one of the other recognized
exceptions to exhaustion should relieve him of that obligation.
E.g., McCoy v. Maytag Corp., 495 F.3d 515, 524–25 (7th Cir.
2007); McLeod v. Arrow Marine Transp., Inc., 258 F.3d 608,
616–17 (7th Cir. 2001).
But Vega has statutory as well as contractual rights, and the
district court did not appreciate the distinction between those
6 No. 16-3119
categories of rights vis-à-vis his obligation to resort to the
grievance procedure. In opposing New Forest’s motion to
dismiss his suit, Vega cited Barrentine v. Arkansas-Best Freight
Sys., Inc., 450 U.S. 728, 101 S. Ct. 1437 (1981), for the propositions
that an employee’s rights under the FLSA are independent
of his rights under a collective bargaining agreement, id. at
737, 745, 101 S. Ct. at 1443, 1447, and that one’s rights under the
FLSA cannot be waived by contract, see id. at 740, 745, 101 S. Ct.
at 1444–45, 1447. R. 23 at 4–5. The former proposition is the one
that is relevant here. No one is suggesting that Vega’s union
purported to negotiate away his FLSA rights in the collective
bargaining agreement. See Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S. Ct. 3346, 3354
(1985) (“By agreeing to arbitrate a statutory claim, a party does
not forgo the substantive rights afforded by the statute; it only
submits to their resolution in an arbitral rather than a judicial
forum.”). What New Forest argues is that the collective
bargaining agreement, by establishing a grievance procedure
for disputes over pay, compels Vega to use that grievance
procedure to resolve his FLSA claim. Barrentine is neither the
Supreme Court’s most recent nor most pertinent decision on
that question. See Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20, 34–35, 111 S. Ct. 1647, 1656–57 (1991) (noting that
Barrentine and similar cases did not resolve question of
whether employee may be contractually obligated to arbitrate
statutory claims).3 But it does make clear that an employee’s
3 Barrentine considered whether an employee who, unlike Vega, already
had exhausted the specified grievance procedure as to a contractual
(continued...)
No. 16-3119 7
statutory rights are distinct from his contractual rights and as
such must be analyzed separately with respect to his right to
enforce them in court. See Barrentine, 450 U.S. at 734–37,
101 S. Ct. at 1441–43. This is the fundamental point that the
district court overlooked.
Later cases have backed away from a reading of Barrentine,
its predecessor, Alexander v. Gardner-Denver Co., 415 U.S. 36, 94
S. Ct. 1011 (1974), and its successor, McDonald v. City of West
Branch, Mich., 466 U.S. 284, 104 S. Ct. 1799 (1984), suggesting
that a collective bargaining agreement can never restrict an
employee’s access to the courts for the purpose of enforcing his
statutory rights. That trilogy of cases, the Supreme Court has
now made clear, did not resolve the question whether an
agreement to arbitrate statutory claims is enforceable against
an aggrieved employee who wishes to pursue such claims in
court rather than by way of a grievance and arbitration. See 14
Penn Plaza LLC v. Pyett, 556 U.S. 247, 263–64, 129 S. Ct. 1456,
1468–69 (2009) (citing Gilmer, 500 U.S. at 35, 111 S. Ct. at
1656–57). 14 Penn Plaza answers this question in the affirmative,
so long as the collective bargaining agreement explicitly
states that an employee must resolve his statutory as well as
his contractual rights through the grievance procedure
delineated in the collective bargaining agreement. Id. at 258–59,
3 (...continued)
minimum wage claim, was free to then pursue an FLSA claim in court
based on the same facts and litigate the statutory claim de novo; the Court
concluded that he could. 450 U.S. at 745–46, 101 S. Ct. at 1447. That holding
does not answer the separate question of whether an employee may bypass
the grievance procedure altogether and proceed directly to court on his
statutory claim. See Gilmer, 500 U.S. at 35, 111 S. Ct. at 1657.
8 No. 16-3119
274, 129 S. Ct. at 1465, 1474. The language of the agreement in
this regard must be clear and unmistakable in order for it to be
enforced against an employee who wishes to bypass the
contractual dispute resolution process in favor of a judicial
forum. Id. at 274, 129 S. Ct. at 1474; see Wright v. Universal
Maritime Serv. Corp., 525 U.S. 70, 79–82, 119 S. Ct. 391, 396–97
(1998).
In this case, the district court did not consider whether the
collective bargaining agreement requires Vega to resort to the
grievance process when he is pursuing rights granted to him
by the FLSA rather than the contract itself. Vega did not cite 14
Penn Plaza to the district court, but, as we have noted, he did
cite Barrentine in support of an argument that his statutory
rights are distinct from his contractual rights and that the
collective bargaining agreement cannot waive his rights under
the FLSA. Although Vega’s argument as framed was incomplete,
if not inaccurate—14 Penn Plaza leaves no doubt that a
collective bargaining agreement can restrict an employee’s
access to a judicial forum for purposes of resolving his statutory
claim so long as it does so in clear and unmistakable
terms—the argument was sufficient to alert the court that an
employee’s statutory rights are independent of his contractual
rights and must be separately analyzed vis-à-vis the employee’s
obligation to invoke the contractual dispute resolution
process. The court apparently did not consult Barrentine, which
would have led it to 14 Penn Plaza.
In sum, the particular question 14 Penn Plaza requires us to
answer is whether the collective bargaining agreement clearly
and unmistakably requires Vega to use the grievance and
No. 16-3119 9
arbitration procedure to resolve his FLSA claim rather than
skipping over that process and proceeding directly to court. It
does not.
New Forest assumes that because the agreement defines a
grievance to include disputes over pay, it necessarily requires
statutory claims on the same subject to be submitted to the
grievance process. Our decision in Jonites v. Exelon Corp.,
522 F.3d 721, 725 (7th Cir. 2008), shows why that assumption
is mistaken. Jonites held that language in a collective bargaining
agreement to the effect that “any dispute or difference aris[ing]
between the Company and the Union or its members as to the
interpretation or application of any of the provision of this
Agreement or with respect to job working conditions” must be
resolved through the contractual grievance procedure was not
an “explicit” waiver of an employee’s right to sue under the
FLSA. Id. We noted that this generalized language was little
different from that at issue in Wright, supra, wherein the
Supreme Court had likewise concluded that there was no clear
and unmistakable language in the agreement requiring claims
under the Americans with Disabilities Act to be arbitrated. 522
F.3d at 725; see Wright, 525 U.S. at 80–82, 119 S. Ct. at 396–97.
The Court in Wright pointed out that the arbitration clause’s
reference to “matters under dispute” could be thought to mean
matters disputed under the contract rather than under any
statute; and there was no provision elsewhere in the contract
explicitly incorporating statutory anti-discrimination provisions.
Id. at 80–81, 119 S. Ct. at 396–97. By contrast, the contractual
language at issue in 14 Penn Plaza explicitly incorporated
a variety of statutory anti-discrimination provisions into the
agreement and provided that “[a]ll such claims shall be subject
10 No. 16-3119
to the grievance and arbitration procedure … as the sole and
exclusive remedy for violations.” 556 U.S. at 252, 129 S. Ct. at
1461. That language, the Court concluded, amounted to an
explicitly-stated agreement to arbitrate statutory claims. Id. at
258–59, 129 S. Ct. at 1465.
Here, by contrast, nothing in the language of the collective
bargaining agreement clearly and unmistakably requires an
employee to resolve a statutory claim through the grievance
procedure. Although section 8.1 of the agreement defines a
grievance to include a claim or dispute “concerning pay,
hours[,] or working conditions or the interpretation or application
of this Agreement,” this could be thought to mean a claim
over the requirements of the contract itself rather than one
about what the FLSA requires. See Wright, 525 U.S. at 80–81,
119 S. Ct. at 396–97. Indeed, that is the most natural reading of
the agreement, given that nowhere in Article VIII or, for that
matter, anywhere else in the agreement is there even a reference
to the FLSA.4 Under no sense of the phrase “clear and
unmistakable” can the agreement be read to compel an
employee to resolve his rights under FLSA through the
grievance process.
Consequently, there was no need for Vega to exhaust his
contractual remedies. He was free to file suit regardless of
whether he first pursued a grievance and did so through each
4 The agreement’s one and only mention of a federal statute is found in
section 6.4, which addresses absenteeism. That provision concludes with a
disclaimer that “[n]othing in this Agreement is meant to conflict with the
Family and Medical Leave Act.”
No. 16-3119 11
of the four steps delineated by the collective bargaining
agreement.

Outcome: The district court erred in granting summary judgment to
New Forest. Absent clear and unmistakable language to the
contrary in the collective bargaining agreement, nothing
precluded Vega from filing suit to enforce his rights under the
Fair Labor Standards Act. The judgment is REVERSED, and the
case is REMANDED to the district court for further proceedings.

Plaintiff's Experts:

Defendant's Experts:

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